TaxTMI 
TaxTMI 
2011 (1) TMI 192
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....of acquisition at Rs. 25,84,382. On the same indexation benefit was claimed and the inflated cost of acquisition was shown at Rs. 69,84,752. However, no corroborative evidence towards the cost of such expenses were furnished along with the return of income. Therefore, the assessing officer had reason to believe that income chargeable to tax has escaped assessment for the assessment year 2004-05 for non-furnishing of evidence in support of expenses claimed towards the cost of acquisition of the assets. 3. A notice u/s 148 was issued on 26.5.2005. In response to that notice, assessee submitted a letter stating therein that the return filed on 1.4.2004 may be treated as having filed against notice u/s 148. Accordingly, the reassessment was framed and A.O. re-computed the capital gains at Rs. 51,95,050. This order of the A.O. was challenged before the CIT(A) mainly on the ground that when there was a time to issue a notice u/s 143(2), the question of invoking the provisions of section 147 was not correct and also the reasons recorded by the A.O. were not supplied to the assessee despite a repeated request of the assessee. The CIT(A) on these two grounds knocked down the re-assessmen....
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.... after recording the reasons and formation of belief that income chargeable to tax has escaped assessment. Therefore, the finding of the CIT(A) which attained finality would not come in the way for re-opening of the assessment. There is no law which debar the revenue from re-opening the assessment second time if first time re-opening was quashed on legal issues. Whatever judgments are relied on by the assessee, all are distinguishable on facts. At the most the first re-opening can be called to be an irregular on account of certain defects but it does not debar the revenue from re-opening the assessment after having formed a belief that income chargeable to tax had escaped assessment and also on fulfilling the legal requirements. 7. The Ld. Counsel for the assessee on the other hand has submitted that in first round of appeal the reopening was annulled. Therefore, the revenue cannot reopen the assessment on the same grounds. In support of his contentions, he has placed a reliance upon the following judgments: 1. R.K. Nagpal v. ACIT 103 TTJ (Nag.) 554 2. Anand Samrat & Co. v. ITO 240 ITR 852 (AP) 3. Parashuram Pottery Works Co. Ltd. v. ITO 106 ITR 1 (SC) 4. CIT v. Rao ....
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....he process of reopening of the assessment as under: Section 147. If the [assessing] officer [has reason to believe] that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his a....
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....e of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139. Provided that in a case- (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and (b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to sub-section (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice. Provided furthe....
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....l and Tribunal allowed the appeal on merit. In that case, the first reassessment proceedings were not knocked down by the appellate authorities on a legal issue. It was rather decided on merit. Therefore, the Hon'ble High Court of Andhra Pradesh have held that once the assessment was reopened and matter was adjudicated on merit the revenue cannot reopen the assessment on second time on similar grounds. But in the instant case the facts are entirely different. In the case of Parashuram Pottery Works Company Limited v. ITO (supra), CIT v. Rao Thakur Narayan Singh (supra) and CIT v. Sun Engineering Works Limited, the facts are entirely different. There was no finding in this judgment with regard to the issue in dispute. 12. In the instant case the first reopening of the assessment was knocked down by the CIT(A) only on two grounds i.e. (1) the reasons for reopening of the assessment were not communicated to the assessees (2) when there was time to issue a notice u/s 143(2) the question of invoking the provisions of section 147 was not correct. The CIT(A) has not given any finding with regard to the sufficiency of reasons recorded for reopening the assessment. Meaning thereby the re....